Expanding Your Referral Network
If they had a choice, all loan originators would most likely prefer to have a referral-only business. After all, it’s much easier to work with prospects who already have been told how great you are.
Developing a referral business should be easy. Make a good first impression, provide customers with extra service throughout the transaction, and be sure they and others are aware that you would appreciate having referrals from their work associates, family members, neighbors, friends and everyone else.
Of course, some are more focused on referral marketing than others. Following are insights offered by a few successful originators.
You may hesitate to ask for referrals because you believe excellent service should be sufficient incentive for customers to refer you to others. Also, you may have customers who don’t go out of their way to provide referrals because they think you’re already busy enough.
It may seem like Origination 101 advice, but you can’t be shy about asking for referrals. Veteran originator David Kuiper, First Place Bank, Holland, Mich., is adamant that customers need to be reminded. “I don’t think our clients realize that we depend on referrals as the lifeblood of our business,” he said. “They think we just sit at our desks and wait for the phone to ring or for people to walk in off the street. It is our job to help them understand that we both need and appreciate referrals. If we don’t ask for the referrals, we aren’t likely to get them.”
There are numerous opportunities to ask including:
*In your first meeting with a prospect. (“Be sure to let your friends and work colleagues know that I can help them as well.”)
“I ask from the moment I meet or talk with them on the phone,” said Jack Lieberman, Guaranteed Rate, Austin, Texas. “I will say ‘When I complete your loan while meeting all your expectations, is there any reason why you would not refer your friends and colleagues to me?’ Their answer is something like ‘No, for sure I will.’ Then I’m asking all though the loan process.”
*In conversations throughout the transaction. (“We’ve got all of your docs and everything is progressing on schedule. Also, don’t forget to share those names of people you mentioned that might be interested in a refinance.”)
“We ask for referrals all along the process,” said Patti Frank, Americana Mortgage Group Southampton, N.Y. “We keep the borrower’s attorney, real estate broker and accountant up-to-date on the process all along the way and make sure on phone conversations and e-mails to let them know we appreciate all referrals.”
*At the Closing. “After the close I ask for six people they suggest I call and introduce myself to them,” said Lieberman. “Then I do a survey to see how I can help them.”
*In various post-closing/other contacts. In addition to phone conversations or personal meetings, there are a number of ways you can emphasize your interest in referrals. Kuiper has included a reminder as part of his e-mail contact information: “My practice is 100% dependent on referrals. If you know of anyone who may benefit from my services, please pass my name and number along. Thanks in advance for thinking of me.”
Other messages that originators have used include:
“Referrals are the cornerstone of our business. We are never too busy to help those that are important to you.”
“Referrals wanted…If you know anyone who is thinking about buying, selling or refinancing, please refer them to me while fixed-rate mortgages are still at…”
You can also mention a similar notation on the back of business cards, in voice mail messages, on your Website, blog, tweets, personal brochure, a sign in your office, and on a badge worn at events. A Florida originator wore such a button while walking through the tailgate party activities at a professional football game. He was definitely noticed.
..*Whenever you are with Realtors, attorneys and other strategic referral partners. Of course, it’s critical to share referrals as well. One top producing originator has made a point to refer potential clients to his Realtor contacts before asking for the agents’ referrals.
Fred Arnold reminds us that there are occasions when it’s not appropriate to discuss referrals. “I ask at every opportunity that I get when I am providing value to the one I am speaking with; although not at such inappropriate occasions such as a funeral, a group setting where the person may be embarrassed to respond,” said Arnold, American Family Funding, Santa Clarita, Calif.
Of course, it’s important to thank those who provide referrals. To avoid violating RESPA, which prohibits offering a “thing of value” in exchange for referrals, it’s best to send a thank you card or e-mail. “I will always send a thank you note for referrals,” said Dean Vlamis, PERL Mortgage, Chicago. He also pointed out that a referral source should be acknowledged more than once. “Throughout the year I also send personal notes to those people who continue to refer me.”
Arnold uses several approaches. “I send thank you notes, make thank you calls and thank referral sources in a group setting where you can say a nice thing about their positive business practices, which makes them look and feel good,” he said.
In addition to sending thank you notes, Frank looks for other ways to show her appreciation to all customers—including those who have provided referrals—without risking a RESPA complaint. “I give yearly holiday gifts. Also when someone is sick, for their birthday or other special occasion that is unrelated to a specific referral, I have also given a one-year subscription to magazines, sent flowers and gift certificates to local restaurants or training sessions at a local gym. We say ‘thank you’ a lot.”
You’re probably already receiving numerous referrals without asking for them. Previous customers are so impressed with you that they tell their friends and others to call. However, think of all the referrals you may be missing simply because you don’t ask. Today is an ideal time to begin expanding your referral marketing.
Editor’s Note: Please let us know your specific referral strategies so that we can highlight them in future articles. E-mail your ideas to: email@example.com
David Robinson is Associate Editor of Broker Banker.